Bulgaria takes 10% stake in Black Sea oil and gas exploration consortium

Bulgaria has acquired a 10% stake in the consortium exploring for oil and natural gas in the Han Asparuh offshore block in the Black Sea, the government and project partners said on January 21.

The move gives the state a direct financial interest in a potentially high-yield project that officials say could generate substantial revenues for the budget if commercial discoveries are made, while also reducing Bulgaria’s reliance on imported energy.

State-owned Bulgarian Energy Holding (BEH) has joined the venture alongside OMV Offshore Bulgaria, a unit of OMV Petrom, and Israel’s NewMed Energy Balkan Limited. Under the new structure, OMV Petrom remains operator with a 45% stake, NewMed Energy holds 45%, and BEH owns the remaining 10%.

BEH will pay its proportional share of costs related to drilling preparations and operations, OMV Petrom said in a statement.

The agreement was signed at the Council of Ministers in Sofia in the presence of outgoing Prime Minister Rosen Zhelyazkov and outgoing Energy Minister Zhecho Stankov, after the government approved BEH’s participation earlier this month.

“This is the first time in modern Bulgarian history that the state will participate directly as an investor in offshore oil and gas exploration,” the government press office said, describing the project as key to diversifying energy sources and strengthening energy security.

Energy Minister Stankov said the move was strategically important, noting that in the event of a commercial discovery the state could benefit both from concession fees of up to 30% and from revenues linked to BEH’s equity stake. “The cheapest gas is our own gas,” Stankov said, BTA quoted.

Negotiations on BEH’s entry into the consortium have been under way for about nine months, BEH chief executive Valentin Nikolov said.

An analysis by EY, commissioned by OMV Petrom and NewMed Energy, estimates that every €1bn invested in offshore projects in the Bulgarian Black Sea could generate up to €5.2bn in gross domestic product and €1.5bn in state revenues.

Han Asparuh is a large deepwater exploration block in the western Black Sea, south of Romania’s Neptun area, covering about 13,700 square kilometres with water depths of nearly 2,000 metres. Exploration activities began in 2012 and have included seismic surveys and the drilling of three wells.

OMV Petrom, the largest energy producer in southeastern Europe, has more than four decades of experience in the Black Sea and is developing Romania’s Neptun Deep gas project, where first production is expected in 2027.